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Saturday, October 31, 2009

The Recent Gold Price Action Is Saying The Fed And Other Western Central Banks Are in Desperation Samba Mode

Over the years governments have been selling their gold to keep the gold price down. To keep the canary in the coal mine from making noises. Well, they are running out of gold to sell. They can't make gold like they can fiat tokens. The US Treasury probably has well less than half of what they say they do. There has not been a public audit of the gold in the US Treasury since the '50s. Why would they change the name of the account that the gold is in, for the second time, to "Deep Storage". Because they sold their gold and took as collateral stakes of some kind in mining companies so that they now own gold in the ground that has not been mined yet? Future history will tell.

If you are not up to speed on this story/concept, check out Gata.org

Bill H's opinion from Le Metropole Cafe
A site for the nitty gritty, the low down. The scoop.

"They can't do it again.

To all; if as I suspect the next leg of the GFC (global financial crisis) is unfolding now, what can we expect to see in the form of government response? More of the same? Can the Fed blow up its balance sheet again? Yes, and I feel sure they will. Can Treasury guarantee and borrow another $13 trillion or even more if necessary? I think not. What about the value of the Dollar? Stocks? Gold?

The "green shoots" lie as I call it is very long in the tooth and being disproven more and more on a daily basis. The only thing that has been accomplished since last fall has been a slowing of the economic and asset structure's decline and they bought some time. Yes we have had an inventory rebuild which will be the driving force behind positive quarterly GDP numbers that the brain dead will cheer and point to as "recovery". It is not. The next "resetting" of mortgage rates is again beginning and will be as bad or worse than what we saw last year. Commercial real estate loans from the "03-'06 timeframe are now coming due with property values declining and refinancings not available, this will be a disaster. The banking industry which cooked their books for Q2 and 3 will again be facing reality.

What happened last year to create "the perfect storm" is unfolding again but this time it's a little different. The banks are already financially crippled so it won't take much to push them over the edge. More importantly, the Treasury is bloated, debt drunk and thus crippled to the point where THEY will become the center of attention. Last year the Treasury put "the family jewels" on the line in order to "save the system". In reality, all they did was to buy some time. The Treasury is stuck! They already have huge borrowing needs just to keep the doors open and the system afloat, they do not have the ability to "borrow more" in order to whitewash "GFC 2".

In this next stage, the solvency and credit quality of the U.S. Treasury will come front and center. The fact is the U.S. is broke, period. We have been broke for quite some time but no one would say it. It didn't behoove anyone to say it so it wasn't said. This next wave of the GFC will make the U.S. bankruptcy too obvious for even an idiot to misunderstand. I expect the crisis to unfold similar in manner to what we saw in summer of '08. Negative announcements (insolvencies), bankruptcies, etc. will pop up left and right like popcorn kernels popping.

Next, we will hear about more fiscal stimulus, banking and systemic guarantees by the Treasury and Fed. BUT this is where it will be different from last year. The Treasury will have its credit shut off by the rest of the world, the Federal Reserve will be the sole buyer of Treasuries in their "virtuous circle" of monetization. Stocks will collapse, bonds will collapse and thus interest rates will explode. I believe the current "the Fed will tighten" fantasy may get a short lived Dollar rally started that will abort once sanity prevails and people realize that this is not an option. The market however WILL TIGHTEN for the Fed by liquidating Treasuries.

In short, the fears of all central bankers in an overlevered fiat world will come to fruition because this time it won't be about the banks, the insurers, car manufacturers, unemployment, housing, bankruptcies, states, nor municipalities. Yes, yes it will be about all of these but most of all it will be about the Treasury! The Treasury put themselves in the crosshairs for years and years by over leveraging themselves and then devaluing the currency with Fed help, and it worked for nearly 100 years. But they really did it this time didn't they?

For years the debt would increase even if they told us we had a surplus budget. They sold our Gold to quiet the alarm bells. They borrowed and spent and borrowed and spent because "that's the way they always did it". But they over did it and piled on so much debt that even a devaluation of 50% won't do the trick. The debt can NEVER be paid back in current Dollars. What they have done over the last couple of years was suicidal, unfortunately it is our own funeral we will be watching. Regards, Bill H."


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Peter Schiff's wrap up for the week (Oct. 30, 2009):




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Thursday's gold price action was a serious "in your face" "go the hell" to western hemisphere central banks. Entities are getting more desperate to get their hands on the real thing. Gold itself. No shady ETFs or anything of that sort. It's getting so almost nobody can be trusted on Wall Street. Since the older "developed" economies are either in big trouble or literally broke, in the process of moving down to third world status, gold is moving from the Western hemisphere to the eastern hemisphere. He who has the wealth has the gold. He who has the gold makes the rules. It's paradigm shift time.

Thursday, October 29, 2009

US Dollar, Silver, The Re-emergence of Gold

From The Privateer's end of week wrap up 'Gold This Week':

If you are content to have your government take care of your financial future, then the Gold price is, or should be, reasonably irrelevant to you. If you are NOT content, then it should be of the HIGHEST interest. That is especially true if you are not buying Gold with $US Dollars. In terms of many other major currencies, Gold has hardly moved in price this week and remains WELL below its highs of earlier this year.

But we would have thought that any subscriber or reader of this page, especially any of our longer-term readers, would have already established a position. Well, the most important Gold price - the $US Gold price - has just revalidated its bull market. That means that it is going to go a LOT higher, especially in $US terms. How high? We have no idea. But no matter how high the $US price of Gold goes, the metal will not REALLY come into its own unless and until it regains its historical role as MONEY. That didn't happen at the end of $US Gold's last bull run in 1979-80. But it took US interest rates above 20 percent to lure people back into $US Dollars and other paper currencies.

It will happen this time. For one reason amongst many others, global government debt levels mean that interest rates of even a fraction of those which held sway at the end of the 1970s would literally "kill" modern fiat currencies. The re-emergence of Gold as money well almost certainly not BEGIN in the US, but it will begin somewhere. Don't forget, the Chinese are now urging their citizens to buy and hold PHYSICAL Gold. Inscrutable? We don't think so.


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The US dollar is looking terrible. Watch out when it goes below its all time low.

If US dollars are shares of US, Inc., then they are signaling the Greatest/Greater US depression.
















The dollar rallied in 2008 so it makes sense that commodities took a dive. Now, the dollar is heading back down as commodities are heading back up. Cost of food, heating oil, driving gas, the necessities of life, heading up in US dollar prices. Not good.



A tidbit of news:

"Food stamp list soars past 35 million: USDA, Thu Sep 3, 2009 3:17pm EDT
WASHINGTON (Reuters) - More than 35 million Americans received food stamps in June, up 22 percent from June 2008 and a new record as the country continued to grapple with the worst recession since the Great Depression of the 1930s."




"We have to spend money to keep from going broke," says Joe Biden (Obama's vice president), a man who is out of his depth in the bathtub. - Bill Bonner

And then there is Ben Bernanke at the head of the Fed despite no financial market, business or banking experience. Huh??? Yup, it's true.












"Who loves ya, baby?" - Putin talking to the bar.

Wednesday, October 28, 2009

Gold and Silver Can Offer Some Protection From Insanity. Francisco d'Anconia. Realistic Inflation Adjusted Gold and Silver Charts

Some reasons for the prices of gold and silver going up. It does not matter much which government fiat token you use to price gold. Most governments are in a competitive fiat token devaluation action. One government that is in horrendous financial shape is the US. It is blowing up its budget deficit. Where/who are they going to borrow from? The deficit will be well over a trillion USD. The rest of the world is getting sick of loaning to a dead beat irresponsible creditor.

From the Fed. A central bank can create as many USD as the US government needs. Of course this devalues the USD. It seems that the US is in such bad shape that the Fed is already buying about half of all new debt that the treasury needs to sell to raise dollars for federal spending. The US Treasury needs to borrow about one half of what it is going to spend this fiscal year.

About one half. Amazing. Insane.


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Francisco d'Anconia's response to "money is the root of all evil",
from Ayn Rand's 'La Rebellion de Atlas' (Pages 401 - 405):



Pagina 401:

No permita que ese hombre la perturbe. Ya sabe usted que el dinero es el origen de todos los males, y d'Anconia es un tipico producto del diner.

Reardon no creyo que Francisco lo hubiera oido, pero lo vio velverse hacia la parea con una sonrisa grave y atenta.

?Asi que piensa que el dinero is el orgen de todos los males? -inquirio Frncisco d'Anconia-. ?Se ha preguntado alhuna vez cual es el origen del dinero? El diner es solo un instrumento de intercambio que no puede existir a menos que existan bienes y personas capaces de producirlos. Es la forma material del
principio segun el cual quienes deseen tratar con otros deben hacerlo mediante transaccines, entregando valor por valor. No es instrumento de los pordioseros, que exigen llorando el producto del trabajo ajeno, ni de saqueadores que lo arrebatan por la fuerza; el dinero se hace solo posible gracias a quienes producen. "es eso lo que considera malvado?

"Cuando se acepta dinero en pago del esfuerzo propio -continuo Francisco- se hace con la condicion de que luego uno lo podra combiar por el producto del esfuerzo ajeno. No son los pordioseros ni los saqueadores los qu dan valor al dinero. Y ni un oceano de lagrimas, ni todos los canones de la Tierra, podran transformar los pedazos de papel que lleva en su billetera, en el pan que necesitara manana para sobrevivir. Esos papeles, qu en realidad deberian ser oro, son un pacto de honor; su tenencia da derecho a la energia de la gente que produce. Su billetera es la declaracion de su conviccion de que, en algun lugar del mundo, hay personas que no quebrantaran ese principio moral que es la raiz del dinero. ?Eso es lo que considera malvado?


"?Alguna vez se ha preocupado por investigar las raices de la produccion? Observe un generador electrico y atrevase a pensar que ha sido creado por la fuerza bruta de seres carentes de inteligencia; intente cultivar una semilla de trigo sin los conocimientos transmitidos por quienes lo hicieron anteriormente; o trate de obtener alimento tan solo co movientos fisicos, y se dara cuenta de que la mente humana es la raiz de todos los ienes producidos y de toda la riqueza que alguna vez haya existido sobre la Tierra.

"Sin embargo -continuo-, usted asegura que el dinero lo consiguen los fuertes a expensas de los debiles. ?Pero a que fuerza se refiere? No es la fuerza de las armas ni de los musculos, ya que la requeza es el producto de la capacidad del hombre para pensar. Entonces, ?el dinero lo obtene quien inventa un motor a expensas de quienes no lo inventaron? ?Lo obtiene el intelignte a ezxpensas del idiota? ?El capaz a expensas del incompetente? ?El ambicioso a expensas del holgazan? El dinero debe hacerse, antes de que pueda ser saqueado, y es hecho a traves del esfuerzo de las personas honradas, en la medida de la capacidad de cada una; y el honrado es aquel que comprende que no puede consumir mas de lo que ha producido.

"Comerciar utilizando dinero es el codigo de los hombres de buenas intenciones, porque el dinero se basa en el axioma de que cada uno es dueno de su mente y de su esfuerzo. El dinero no otorga ningun poder para prescribir el valor de un esfuerzo, mas alla de la eleccion voluntaria de quien desea ofrecer el suyo a cambio.


Pagina 402:

"El dinero le permite obtener por sus bienes y su trabajo lo que vale para los que lo compran, pero no mas que eso. el dinero solo permite tratos que se hacen en beneficio mutuo, segun el libre juicio de ambas partes.

"El dinero exige el reconocimiento de que se debe trabajar en beneficio, y no en perjuicio, propio; para ganar, y no para perder. El dinero reconoce que el hombre no es una bestia de carga nacida para transportar el fardo de su propia miseria, que debe ofrecer valore y no agravios, que el lazo comun entre los seres no es un intercambio de sufrimientos, sino de bienes. El dinero exige vender, pero no debilidad a combio de estupidez, sino talento a combio de razon; exige comprar, no lo peor, sino lo mejor que pueda conseguir. Y cuando las personas viven basadas en el intercombio, poniendo como arbitro decisivo a la razon en lugar de la fuerza, lo que triunfa es el mejor producto, el trabajo mas perrfecto, el hombre de mejor jucio y mayor idoneidad. El grado de productividad de cada uno es tambien el de su recompensa. Este es el codigo de existencia, cuya herramienta y simbolo es el dinero. "Es esto lo que considera malvado?

"El dinero es solo un instrumento que lo llevara adonde quiera, pero no lo reemplazara commo conductor; le dara los medios para la satisfaccion de sus deseos, pero no le proveera dichos deseos.

"El dinero es el azote de quienes intentan revertir la ley de la causalidad; de quienes buscan reemplazar la mente apoderandose de los porductios de la mente.

"El dinero no comprara la felicidad para quien no sepa que desea; no le dara un codigo del valores a quien haya rehusado adoptarlo, ni porporcionara un porposito a quien haya eludido la eleccion.

"El dinero no brindara inteligencia al estupido, ni caraje al cobarde, ni respeto al incompetente. Quien intenta comprar el cerebro de sus superiores, reemplazando con dinero su mayor capacidad de juicio, termina convirtiendose en victima de sus inferiores. Los hombres inteligentes lo abandonaran, pero los embaucadores y los farsantes iran en manadas hacia el, atraidos por una ley que el desconoce: la de que nadie puede ser menos que su dinero. "Es este el motivo por el que lo considera malvado?

"Solo quien no la necesita esta capacitado para heredar requeza, o sea aquel que de todos modos haria su propia fortuna sin que importe su punto de partida. Si un heredero esta a la altura de su dinero, el dinero le sirve; de lo contrario, lo destruye. Pero cuando usted y quines comparten sus ideas observan a alguien asi, dicen que el dinero lo ha corrompido. ?Es verdad? ?O ha sido el quien ha corrompido al diner? No envidie a un heredero inutil, pues su requeza no es suya. No le habria ido mejor en caso de obtenerla. No tiene sentido considerar que esa riqueza deberia haberse distribuido entre usted y los otros, pues cargar al mundo con cinuenta parasitos en vez de uno no reviviria la virtud muerta de esa fortuna. El dinero es un poder viviente que si es despojado de su raiz, muere; por eso no le servira a una mente que no este a su altura. "Es este el motivo por el que lo considera malvado?

"El dinero es su medio de supervivencia. El veredicto que pronuncia sobre su fuente de supervivencia es el mismo que pronuncia sobre su vida. Si la fuente es corrupta, esta condenando su propia existencia. ?Ha consequido el dinero por medio del fraude? ?Siendo alcahuete de los vicios o de la estupidez humana? ?Sirviendo a los imbeciles con la esperanza de conseguir mas de lo que su


Pagina 403:

capacidad merece? ?Degradando sus ideales? ?Realizando una tarea que desprecia para vendersela a quienes aborrece? En tal caso, su dinero no le proporcionara ni un momento de autentica felicidad, pues todo lo que compre no sera un elogio hacia su persona, sino un reproche; no un triunfo, sino un constante recordatorio de la verguenza. Entonces gritara que el dinero es malo. ?Malo porque no sustituye al respeto que se debe a si mismo? ?Malo porque no le deja disfrutar de su corrupcion? ?Es esta la causa de su odio hacia el dinero?

"El dinero siempre sera un efecto del que las personas somos causa. Es producto de la virtud, pero no lo hara virtuoso ni lo redimira de sus vicios. El dinero no le dara lo que no se merezca, ni material ni espirtualmente. ?Es esa la razon por la que lo aborrece?

"O acaso sostiene que el amor al dinero is el origen de todos los males? Amar una cosa es conocerla y respetar su naturaleza; por lo tanto, amar al dinero es conocer y respetar el hecho de que representa lo mejor de cada uno, que es la llave maestra para intercambiar su esfuerzo por el mejor esfuerzo de los demas. La persona que venderia su alma por unos centavos es la que proclama a gritos su odio hacia el dinero; y hay que reconocer que tiene motivos para odiarlo. Pero los amantes del dinero estand dispuestos a trabajar por el, y saben que estan en condicones de merecerlo.

"Permita que le de un consejo clave sobre el caracter de los seres humanos: quien maldice el dinero, lo ha obtenido de manera deshonrosa, pero quien lo respeta, se lo ha ganado honestamente.

"Huya de quien le dig que el dinero es malvado, pues esa frase es la senal que anuncia la presencia de un saqueador. En tanto los hombres vivamos en sociedad y necesitemos medios para tratar unos con otros, el unico sustituto, en caso de abandonar el dinero, serian las armas.

"el dinero exige las mas elevadas virtudes para consequirlo o conservarlo. Quienes carecen de valentia, de orgullo o de autoestima, los que no tienen sentido moral de su derecho al dinero y no estan dispuestos a defenderlo como si se tratara de su propia vida, esos que parecen pedir perdon por ser ricos, no lo seran por mucho tiempo, pues son un cebo natural para las bandas de saqueadores, que desde hace siglos se agazapan bajo las rocas y salen en cuanto huelen a alguien que ruega ser perdonado por ser rico, y se apresuran a aliviarlo de su culpa, de su dinero y de su vida, tal como lo merece.

"Entonces vera aparecer a hombres de doble moral: los que se basan en la fuerza, y sin embargo, dependen de quienes viven del comercio para darle valor a su dinero robado. Son los que quieren ser viruosos gratuitamente, aquellos que en una sociedad moral son los criminales de quienes la ley deberia proteger a los demas. Pero cuando una sociedad establece la existencia de crimiinales por derecho y de saqueadores legales, es decir de personas que utilizan la fuerza para apoderarse de la riqueza de victimas desarmadas, entonces el dinero se convierte en vengador de su creador.

"Esos ladrones se sienten seguros al robar a indefensos, luego de haber sancionado una ley para desarmarlos, pero su botin se convierte en un iman para otros saqueadores que tambien se lo arrebataran de la misma forma como ellos lo hicieron. Entones el exito ira, no al mas competente en la produccion, sino al capaz de la mas despiadada brutalidad y crueldad. Cuando la fuerza se convierte


Pagina 404:

en norma, el asesino vence al carterista, y la sociedad desaparece entre ruinas y cadaveres.

"?Quiere saber si ese dia se acerca? Observe al dinero, pues es el barometro de las virtudes de una sociedad. Cuando vea que el comercio se hace, no por consentimiento de las partes, sono por coercion; cuando advierta que para producir, necesita obtener autorizacion de quienes no producen nada; cuando compruebe que el dinero fluye hacia quienes trafican no bienes, sino favores; cuando perciba que muchos se hacen ricos por el soborno y por influencias mas que por el trabajo, y que las leyes no lo protegen contra ellos, sino, por el contrario, son ellos los que estan protegidos contra usted; cuando repare en que la corrupcion es recompensada y la honradez se convierte en autosacrificio, entonces podra afirmar, sin temor a equivocarse, que su sociedad esta condenada.

"El dinero es un medio tan noble que no compite con las armas, ni pacta con la brutalidad. Nunca permitira sobrevivir a un pais basado parcialmente en la propiedad y parcialmente en el robo. Siempre que aparecen elementos destructores entre los humanos, comienzan destruyendo al dinero, porque este es la protecion del hombre y la base de su exestencia moral. Los destructores se apoderan del oro, y entregan a cambio un monton de papel impreso. De esta forma, destruyen todas las normas objetivas de valor y dejan al hommbre en las garras de un juez arbitrario. El oro era un valor y dejan al hombre en las garras de un juez arbitrario. El oro era un valor objetivo, un equivalente a riqueza producida. El papel es una hipoteca sombre riqueza que no existe, respaldada por un arma apuntada al pecho de quienes se espera han de producirla.

"El papel es un cheque librado por saqueadores legales sobre una cuenta ajena: sobre 'la virtud de las victimas'. Espere al dia en que ese papel sea rechazado con la leyenda 'sin fondos'.

"Cuando se haya convertido a la maldad en medio de supervivencia, no espere que los hombres sigan siendo buenos, no espere que conserven la moral y pierdan la vida convertidos en forraje de los inmorales, no espere que produzcan cuando la produccion sea castigada y el robo recompensado. Entonces, no debera preguntar "?Quien esta destruyendo al mundo?' porque sera usted mismo el que lo estara haciendo.

"Se encuentra entre los mayores logros de la civilizacion mas productive y se pregunta por que todo se derrumba, mientras maldice la fuente que le da vida: el dinero. Ve al dinero como lo han hecho sus antepasados salvajes, y se pregunta por que la selva vuelve a acercarse a los bordes de las ciudades. En la historia de la humanidad, el dinero ha sido siempre botin de los saqueadores, de un tipo o de otro, cuyos nombres fueron combiando, pero cuyos metodos fueron siempre los mismos: apoderarse del dinero por la fuerza y mantener cautivos a los productores, degradandolos, difamandolos y despojandolos de su honor. Esa frase acerca de la maldad del dinero, que expresa con meticulosa imprudencia, viene de la epoca en que la requeza era producida por el trabajo de los esclavos, esclavos que repetian los movimentos inventados con anterioridad por la mente de alguien y que siguieron ejecutandose sin mejora alguna durante siglos. Mientras la produccion fue governada por la fuerza y la riqueza se consiguio por usurpacion, habia poco para conquistar. Sin ebmargo, a lo largo de siglos de miseria y hambre, las personas exaltaron a los saqueadores como aristocratas de la espada, como aristocratas desde la cuna, y mas tarde, como aristocratas de la bu-


Pagina 405;

rocracia, despreciendo a los productores, como esclavos, comercienates, vendeores o industriales.

"Para gloria d la humanidad, existio por primera y unica vez en la historia, un pais del denero y no me es posible dar un mayor tributo a los Estados Unidos de America porque eso significa un pais donde reinan la razon, la justicia, la libertad, la produccion y el progreso. Por primera vez, la mente y el dinero de los hombres quedaron libres, dejo de existir la fortuna como botin de conquista y, en lugar de guerreros y esclavos, surgio el verdadero productor de riqueza, el gran trabajador convertido en el tipo mas elevado de ser humano: el autosufciente, el undustrial estadounidense.

"Si me pide que de algun nombre a la distincion de la cual los estadounidenses pueden estar mas orgullosos, yo elegiria, porque contiene a todas las demas, la de haber sido el pueblo que acuno la expresion 'hacer dinero'. Ninguna otra lengua o nacion habia utilizado semejante formula, porque los hombres siempre consideraron a la riqueza como a una contidad estatica que solo podia ser arrebatada, mendigada, heredada, distribuida, saqueada u obtenida como favor. Los estadounidenses fueron los primeros en comprender que la requeza debia ser creada. La frase 'hacer dinero' contiene la esencia de la moralidad humana.

"Sin embargo, debido a esas palabras, los estadounidenses fueron denunciados por las culturas podridas de los contnentes de ladrones. Ahora, el credo de los saqueadors los ha llevado a pensar que los mas dignos industriales son motivo de verguenza, que su prosperidad es motivo de culpa, que los industriales mas eminentes son unos canallas, que sus magnificas fabricas productio de su trabajo honrado son el fruto del trabajo de exclavos movidos por el latigo, como los que construyeron las piramides de Egipto. El depravado que se lamenta de no ver la diferencia entre el poder del dolar y el poder del latigo, deberia aprender la deferenia en su propia piel... como creo que ocurria a la larga.

"Hasta que descubra que el dinero es la raiz de todo lo bueno, seguira encaminandose hacia su propia destruccion. Cuando el dinero deje de ser la herramienta mediante la cual los hombres se relacionan entre si, los hombres mismos se convertiran en herramientas de otros hombres. Sangre, latigos, armas; o dolares. Debe elegir.... No hay otra opcion, y el tiempo se esta acabando."
"


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Shadowstat's realistic inflation adjusted gold and silver prices. These charts and the nature of those in power say that the gold and silver prices have a long way to go on the upside.

At Bloomberg.com:
...
Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based Shadowstats.com. He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.

Gold futures for December delivery closed Oct. 16 at $1,051.50 an ounce on the New York Mercantile Exchange’s Comex division, gaining for a third straight week.

“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.
...

Tuesday, October 27, 2009

Gold, Goldfinger, Celente, Garrett, Bought Economists

Shirley Bassey singing Goldfinger - Live at Royal Albert Hall





















Gerald Celente does not see much hope for the US:




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"The general shape of this universal delusion may be indicated by three of its familiar features. First, the idea that the panacea for debt is credit." - A BUBBLE THAT BROKE THE WORLD, By GARET GARRETT

The above link is to a free version of the book. A 186 page .pdf down load. Written in 1932.



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Nothing much has changed. Nothing much has been learned. A 1934 Chicago Tribune cartoon:



















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Priceless: How The Federal Reserve Bought The Economics Profession

Read more at:
http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."
...


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Harrods to sell gold bullion for first time

It is renowned for its glitzy clientele and upmarket Knightsbridge location, but shoppers at department store Harrods will from today be able to buy the ultimate luxury accessory – gold bars.


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Scotia first Canadian bank to deliver gold to your door

Saturday, October 24, 2009

Gold and Silver Ceilings Are Now Floors

For well over a year, gold has been up against a ceiling of about USD 1,000. It has decisively broken through that level. That ceiling for gold is now a floor for gold. The upside down head and shoulders patterns turned out to be good indicators of the future of the price of gold.








Since too many people's heads are in the sand, took the blue pill, with a controlled US mass media, they are not aware of what Ron Paul is aware of, knows of, of what is coming inside the US



Friday, October 23, 2009

A Review of Gold, Silver (Final Settlement) and Economic Basics

If you think through the reality below, you'll see that ownership of gold and silver in your own hands is a no brainer:

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Start some basic 'ol reality:

If you are going to go to work in the construction trades, there are some simple basic things you need to learn no matter, literally, which trade you choose.

Some of these are:

1. How to determine if something is level (perpendicular to the pull of
gravity).
2. How to determine if something is plumb (in line with the pull of gravity).
3. How to make something 45 degrees from plumb or level


If you are going to go to work in any field in life, or you choose to be a dead beat or dilettante, still, there are some simple basic things you need to learn no matter what you choose. Particularly if you're a dead beat or diletante that is starting out with a grub stake that someone gave you, and you need to maintain and/or increase the real value of it because you are planning 0n never working again in your life.

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Start some more basic 'ol reality:

Let's call economic basics simple 'ol basic reality:

The more wealth a person has or a group of people have, the higher the standard of living he/they have.

Wealth is:
1. economic goods and services
2. that people are willing to pay for.

Wealth is not money, currency or government fiat tokens. Gold would not have been of value to Robinson Crusoe when he landed on the island.

However, money, currency and government fiat tokens can be stores of value.

Value can be converted into capital.

Capital is the means of production.

Capital can only come from savings
(Before there is capital, there has to be savings).
(The process of tranfering value from savings to capital is called investing.)

Capital plus the use of human minds and hands create wealth.

There is no theoretical limit to the creation of wealth.

There is a limit to how much debt a financial/economic system can take on.

It is impossible to increase one's wealth by borrowing to consume (Borrowing to invest to create wealth is another whole story).

Borrowing to consume merely decreases one's future wealth because of the interest expense that has to be subtracted from future possible savings, and because of the principle payments that have to be subtracted from future savings. No increase in savings, no increase in wealth. Too much borrowing relative to wealth creation and you actually consume capital, become less wealthy.

Statist governments screw up this process time and time again. Sometimes they hurt the process particularly badly which is what is going on in the US right now. The government is actually working to decrease the wealth of the US, thus its standard of living. It is borrowing for consumption purposes. Big time, when that is exactly what caused the problem in the US and many other countries to begin with.

Regarding the US dollar; the US Treasury is broke. To continue much of its spending it has to borrow dollars to pay off existing debt that is due. To increase spending to "stimulate" the economy, it has to barrow even more US dollars that it does not have. Its last resort is to borrow from the Fed. The Fed can create them out of thin air after it takes on new I.O.Us from the US Treasury. This increases the assets of the Fed composed of debt and increases the debt of the US Treasury, making even more broke.



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Inflation is the increase of the supply of a money, currency or government fiat token. Inflation causes/effects rising prices eventually. No systemic inflation, no systemic rising prices, like during most of the 1800s in the US. Inflation did not start for real, in any systemic sense till the Fed was started in 1913. It has been up, up and away ever since.

Money (gold, silver, packs of cigarettes, women's nylons), Currencies (silver and gold certificates/notes, or other notes/financial instruments redeemable in something), and tokens (government fiat paper and digital bits redeemable in nothing) have 3 things in common:

1.) Medium of exchange
2.) Store of value
3.) Unit of measure/account (they measure value)

And they are different from each other in three ways:

A. Money does not have any liability attached to it.
It ***is*** final settlement.

B. A currency has liability attached to it. It is redeemable in something specific.
It is ***not*** final settlement.

C. Government fiat paper and fiat digital bits while not redeemable in anything, can not be created without debt/credit being created at the same time due to the nature of the current fractional reserve banking system.
It is ***not*** final settlement.

Inflation, depending on the degree of:

1. Causes people to shy away more and more from using what is increasing in supply (US dollar loosing its reserve status amongst central banks).
2. Steals/robs stored value.
3. Shortens the yard stick (unit of measure) while people still use it as a full measure, screwing up their financial and economic calculations for the future (mal/bad investments).

So, what is the no-brainer protection from what is going on at central banks and their treasuries? Or is it treasuries and their central banks?

Gold, silver and other atoms in your own hands.

The more they create government fiat paper and fiat digital bits (most US dollars are just digital bits on a hard drive, and that hard drive sure as heck does not belong to you), the higher in price gold and silver will go.

Here is something to think about. If you deposit dollars in a bank, where exactly are those dollars once you have deposited them in the bank?

Just like it is impossible to own real estate in the US now a days, you can only rent it from a government (what you buy is limited control over real estate, not real estate). So, too, you can not own your dollars that are in the financial system. You do not have access to root on the server nor own the server that houses and controls the dollars. You are merely allowed limited controled use of "your" dollars.

***







Reality is what it is. Reality doesn't care if people don't care what it is, or have totally forgotten what it is, or have no knowledge of it.

The world's monetary system is in the process of big change. It's in the process of breaking. There was too much ignorance amongst the masses that allowed too much fraud to develop in the government run and controled monetary system.

Now the Piper is insisting on being paid. The Piper always gets paid.

Those that educated themselves about reality and did something about it, took concrete steps as early as possible (as in buying gold and silver at least), will probably weather what is coming and may even prosper.

Wednesday, October 14, 2009

An Amazing Gold Related Chart

Since the beginning of this decade, staying in general US stocks/equities has been a loosing proposition.

The Dow Index priced in gold:



Can you imagine what some US real estate index priced in gold must look like? Yikes!!!!

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Wait till this build up in central bank reserves (debt) make it out into the economy:



This graph is from Hugo Salinas Price's article entitled:

22/September/2009
A new Magna Carta for our times


A little more history to go with the above graph:



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Not good at all. More skull drudgery may be coming to the surface.

Central Banking: A Blight On Humanity

by Rob Kirby | October 9, 2009

Impeccably reliable sources have informed me that as recently as Sept. 30, 2009 – the last possible day of trade in the Sept. 09 gold futures – a number of well-heeled market participants “bought” substantial tonnage worth of gold futures on the London Bullion Market [LBMA] and immediately told their counterparties they wanted to take instantaneous delivery of the underlying physical bullion.

The unexpected immediate demand for substantial tonnage of gold bullion created utter panic in at least two banks who were counterparties to this trade – J.P. Morgan Chase and Deutsche Bank – because they simply did not posses the gold bullion which they had sold short [an illegal act which in trading parlance is referred to as a “naked short”].

Because these banks did not have the bullion to honor their contracted commitments, one or both of them approached the counterparties and asked if there was any way they could settle this embarrassing matter quietly on a “cash basis” to absolve the banks from fulfilling their physical bullion delivery obligations. The purchasers were not interested in a ‘cash settlement’ and demanded delivery of physical bullion giving these banks 5 business days to resolve the situation. A premium of as much as spot plus 25 % [that would be 1,250 – 1,300 per ounce of gold] was offered to settle this matter in fiat money instead of the embarrassment of a very public “failure to deliver” on the part of the London Bullion Market Association.
...

Sunday, October 11, 2009

Three New Gold Highs

Gold has established a number of new highs.

All time gold bull market monthly high:



All time gold bull market weekly high:



All time gold bull market daily high:



Gold has broken into new high territory and is in the process of making another significant run up priced in government fiat tokens which are declining in value (purchasing power). Amazingly, many in the English speaking world do not get what is going on and are not buying gold or silver. But, they will, later, at much higher prices as the emotional pain of constantly rising gold and silver prices builds up in them to the point where they break down and buy gold, silver or something related to the two.